Hawthorn president backs app that will “put underquoting to bed”

It’s the heartbreaker of the real estate business and a huge time waster – the underquote. But now two high-profile Melbourne men say they’ve developed a smartphone app that will kick the dirty tactic into oblivion.

“Vendors are going to have a bowel movement this weekend," predicts ­Melbourne buyer’s agent David Morrell of his new pet, called realAs. The app, based on an algorithm developed by RMIT University, promises to predict the selling price of any residential property in Australia with a high degree of accuracy.

Mr Morrell, who buys some of Melbourne’s most expensive real estate on behalf of wealthy clients, has launched it with Hawthorn Football Club president Andrew Newbold who is equally upbeat.

Says Mr Morrell of realAs, “It’s very clever and its going to be very disruptive. It will put underquoting to bed."

Mr Morrell frequently calls out unethical and outrageous behaviour via the blog he publishes with business partner ­Christopher Koren. Of the new app, he says proudly, “I’m not sticking my name to something that’s a bit of lu-lu."

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Initial testing of the algorithm, say Mr Morrell and Mr Newbold, found predictions were within 5 per cent of the selling price two-thirds of the time and within 10 per cent of the selling price nine out of 10 times. The app is free to download and use. Revenue is to be generated from advertising.

Mr Morrell said the idea first came to him four years ago while visiting George Mason University in Washington DC. “They had just come up with a predictive algorithm. At the time I was lamenting how hard it was to get the real price from estate agents. I asked the professors: ‘Could this be adapted to predict real estate prices?’ The answer was yes."

For Andrew Newbold, jumping on board was as much about improving transparency in the real estate market as supporting the “execution of a good idea" and bringing it to market. He did that with renewable energy provider Wind Power,which he founded and later sold to Origin Energy in 2009.

“We’ve done a lot of testing and we’re very confident that it will provide accurate real time predictions." Mr Newbold told AFR Weekend. “I’ve dabbled in property and property investment and one of the most frustrating things is a lack of transparency and a lack of information."

Mr Newbold will provide the business acumen while former DDB creative director Jeremy Press, also an investor and director, will provide branding and marketing expertise. For Morrell, realAs is a crusade against agents who repeatedly underquote in Melbourne’s blue-ribbon south east and Bayside suburbs.

“There’s blatant underquoting and everyone is sick and tired of it," said Melbourne estate agent Greg Hocking. “David has been a lightning rod exposing this culture among some agencies and how they operate."

Mr Hocking said of realAs.com: “It can only be as good as the information that’s going into it and how up-to-date that information is. It also cannot equate for the subjective nature of the market."

To get a prediction on realAs, buyers must first register and then input the address of the property. There is also the opportunity to comment on listings and ask questions of the agent about the price.

RealAs chief executive Josh Rowe, a digital entrepreneur who has held senior technology roles at Australia Post and Medibank, said the app would get more accurate as more buyers registered and used it. Apart from crunching past sales data and current market information, it will also use crowd-sourced data. “Punters will be able to input their own estimates. The algorithm will weight them in determining a price, depending on how accurate the user has been in the past."

Mr Rowe added that by comparing the accuracy of past quotes against realAs predictions and selling prices, buyers would also be able to form a view about the market knowledge of a particular agent and whether they underquote.